Galaxy Digital Holdings CEO Mike Novogratz has called the Helios mining deal a “transformative acquisition” for the company as it works to increase its exposure to the Bitcoin mining sector.
The crypto investment firm’s $65 million acquisition of Argo Blockchain’s flagship mining facility was announced on Dec. 28 as part of Argo’s drastic measures to avoid bankruptcy.
In a Dec. 29 tweet about the deal, Novogratz emphasized that Galaxy “strongly believes in the long-term future of Bitcoin (BTC) and the company will continue to ramp up its mining initiatives:
“Bear markets are for building. We believe in BTC over the long term and expect the lowest cost miners to win over time. Helios is a transformative acquisition that will expand our mining capabilities and services as we continue to build for the decentralized future.”
Since we started bitcoin mining in the first quarter of 2021, we have outsourced our miners to hosting providers. But we always had the idea that we would integrate our mining skills vertically.
— Mike Novogratz (@novogratz) December 28, 2022
Explaining the deal in more detail, the Galaxy CEO outlined that the company had a specific “thesis” on how to approach the mining sector: “cheap power, a very efficient team” and “buy ASIC miners cheap.”
“This is a recipe for success in mining, even if the hash rate increases,” he said.
Recent Hashrate Index data has seen Bitcoin ASIC miner prices hovering around lows not seen since at least 2021, with the most efficient ASIC miners prices falling 86.8% from their May 2021 peak are.
Galaxy has five divisions in trading, wealth management, crypto mining, venture investing and investment banking. According to its website, the company currently has $1.9 billion in assets under management.
Currently, Galaxy has mainly used hosting services for its mining operations. However, Novogratz notes that owning 200 megawatt (MW) capacity Helios will not only allow the company to operate miners on its own premises, but also to host them for others.
Helios potentially has a great ability to scale to make it one of the largest miners out there. Argo Blockchain already revealed in May this year that it has plans to increase electrical capacity to 800 MW in “the coming years”.
At the time, the company also said it expected Helios to reach BTC mining capacity of 5.5 exahashes per second by the end of the year, with the potential to eventually reach 20 EH/s.
It appears that Galaxy has some cash to inject amid the 2022 bear market, considering it also made a $35 million equipment financing loan to Argo Blockchain alongside the acquisition.
Related: BTC Price Holds $16.5K But Funding Rates Increase Risk Of Fresh Bitcoin Bottoms
The move also adds another coup from earlier this month, when Galaxy acquired crypto self-custody platform GK8 for an undisclosed fee.
GK8 was auctioned off as part of Celsius’ bankruptcy proceedings after the defunct crypto lender bought the company for $115 million in 2021.
Novogratz called the acquisition a “critical cornerstone in our efforts to create a true full-service financial platform for digital assets.”
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